By Purna Bahadur Pokhrel
The Ruby Anniversary of the South Asian Association for Regional Cooperation (SAARC), the most prominent South Asian regional forum, marked on 8th December 2025. This date coincides with its establishment in 1985 in Dhaka, Bangladesh, leaving a legacy of excellence.
The celebration of the Quadragennial (40th anniversary) must be one of self-reflection on its near-total paralysis, since the regional association still holds the grand promise of collective prosperity for nearly two billion people tackling regional challenges like a massive population burdened by the painful trifecta of poverty, climate vulnerability, and underdevelopment. The 40-year milestone of the organization should be proof of 'Forward at Forty' to tackle the challenges of failing to deliver on its transformative mandate, essentially becoming a hostage to deep-seated political frostiness, most painfully the ongoing rivalry between India and Pakistan.
The real disappointment today isn't just the fact that there hasn't been a Summit since 2014, but the institutional handcuffs that allowed this decade-long slumber. While the core mission remains peace and economic upliftment, SAARC's inability to create a conflict-resolution mechanism and its rigid, unanimity-based decision-making structure have reduced it to a stage for talk, not action. This institutional stiffness has a direct, tragic consequence: intra-regional trade is embarrassingly low, stuck below 5 percent. This represents a colossal, wasted opportunity for one of the world's most populous and least-connected regions to lift itself up.
South Asia: A Land of Immense Potential, Deep Division
South Asia is an economic riddle despite the region holding massive demographic muscle and market potential, home to over 1.9 billion people, but globally it remains the least economically integrated. The root of this underperformance is a combination of chronic geopolitical tensions that have locked the SAARC framework in a standstill, and critical structural barriers that make trade expensive. These barriers include burdensome Non-Tariff Barriers (NTBs), such as overly complex customs checks and non-standardized rules, and severe physical connectivity deficits in cross-border infrastructure. In many cases, it's cheaper to trade with a distant global partner than with the country next door.
To finally unlock its potential-to turn those high growth rates into meaningful poverty reduction-South Asia must get pragmatic. The immediate focus needs to shift to investment in trade facilitation and infrastructure and smartly utilizing smaller, sub-regional groupings like BIMSTEC and BBIN to build functional, economic reliance, effectively side-stepping the political paralysis that has crippled comprehensive regional integration.
Small Wins with Big Failures
SAARC’s core objectives cover multiple areas, including achieving common prosperity, unlocking potential in trade, technology, education, and strengthening cooperation on the world stage. The significant failure of The South Asia Free Trade Area (SAFTA), which became operational in 2006, to boost intra-regional trade stems from the crippling combination of geopolitical mistrust and practical trade barriers. The enduring political hostility, particularly the lack of trade normalization between the two largest economies, India and Pakistan, prevents the free movement of goods and capital essential for a functioning FTA. This political inertia is compounded by the widespread use of Non-Tariff Barriers (NTBs) such as complex and non-transparent customs procedures, differing product standards, and excessive red tape, which effectively nullify the benefits of the reduced tariffs. Furthermore, the "Sensitive Lists" maintained by member states remain long, excluding many high-potential trade goods from tariff concessions, while poor physical and digital connectivity across borders dramatically increases logistics costs, ensuring that intra-SAARC trade remains stagnant at a low 5% of the region's total global trade.
The South Asian University (SAU) in New Delhi has persisted but is unable to achieve true regional character due to chronic political interference, slow and inconsistent funding from member states, and challenges in attracting and retaining top-tier faculty and students uniformly across the region. However, it has the potential to foster regional integration and development among SAARC nations by serving as a Centre of Excellence for advanced post-graduate studies and research, cultivating a new generation of highly skilled leaders committed to South Asian cooperation and understanding among the member countries—Afghanistan joined in 2007, and the other seven founding countries (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka) joined in 1985.
The SAARC Development Fund (SDF), set up to inject money into regional projects, especially in the social, economic, and infrastructure sectors, has failed to prove its effectiveness and full potential. The SDF has been critically hindered by the overarching geopolitical tensions within SAARC, particularly between India and Pakistan, leading to a profound lack of political will and consensus among member states. This political deadlock frequently stalls major regional initiatives and prevents the SDF's larger Economic and Infrastructure Windows from fully activating and financing high-impact, commercially viable projects that require unanimous backing and trust, resulting in the Fund's underutilization of its authorized capital and reducing its overall relevance as a robust regional financial institution compared to similar funds in other regional blocks.
The immense dormant potential of the Counter-Terrorism Frameworks, which signaled an attempt at collective security of the region in 1987 with an Additional Protocol in 2004, is rooted in their comprehensive legal foundation and shared regional need. However, its effectiveness is undermined by the total lack of political will and consensus on the definition and source of terrorism among member states. While the conventions oblige members to prosecute or extradite suspects overcoming the 'political offense' defense, implementation is paralyzed by the deep-seated geopolitical rivalry between India and Pakistan, where cross-border terrorism is a central, non-negotiable bilateral issue that the SAARC charter forbids discussing. This fundamental mistrust prevents meaningful intelligence sharing, effective operation of mechanisms like the SAARC Terrorist Offences Monitoring Desk (STOMD), and the harmonization of enabling national legislation, essentially rendering the framework a symbolic rhetorical exercise rather than a functional security apparatus.
A Revival Plan: Necessary Steps for Functionality
The huge opportunity to transform the lives of the SAARC countries should be made functional and coherent again by facing up to the need for fundamental reforms through a charter review and amendment to tackle the unanimity rule. This can be done by adopting the "SAARC minus X" model, wherein willing members like India, Nepal, Bhutan, and Bangladesh can move forward with joint projects even if all eight aren't ready to jump in.
The Secretariat, which is in Kathmandu, should be strengthened by giving additional power, like enhancing the Secretary-General’s level. The office must be granted greater autonomy and teeth to coordinate and enforce decisions, moving beyond its status as a mere administrative assistant.
The Confidence Building Mechanism (CBM) must be developed into the formal Confidence Building Process (CBP) with the right to settle disputes among the member countries. The Secretariat should be tasked with discussing and mediating the substantive political and security issues that currently block progress, finally moving the organization past its blanket exclusion of bilateral and contentious issues.
Since rebuilding trust needs a practical foundation, Non-Political Avenues must be leveraged and developed, expanding initiatives like the South Asian University. Given the region's shared vulnerability to floods and earthquakes, high-impact areas like disaster management and health cooperation, especially post-pandemic supply chain security, can help build functional, non-controversial interdependence by focusing on non-political issues.
Being the largest economy of the region and a founding member, India should primarily strengthen SAARC by leveraging its large economy to offer asymmetrical trade and investment concessions to smaller member states, demonstrating a non-reciprocal "big brother" facilitative approach. Simultaneously, India must prioritize funding and implementing non-controversial regional connectivity projects like MVA and power grids to build collective economic benefits and depoliticized trust, thereby revitalizing the organization's functional mechanisms.
Likewise, Nepal, as a founding member and permanent host of the SAARC Secretariat, should leverage its neutral diplomatic position to actively serve as the chief facilitator and consensus builder, continuously mediating political differences to keep the regional dialogue alive. Furthermore, Nepal must lead by example through rapidly implementing SAARC agreements on its territory, especially in areas like regional connectivity and energy trading, to demonstrate the functional benefits of cooperation and pressure other member states into fulfilling their commitments. The Chair's paramount duty is to work closely with all Member States in the spirit of friendship and consensus while simultaneously acting as the staunch advocate for structural reforms. These reforms are critical to finally allowing the organization to bypass paralyzing bilateral disputes and begin delivering real, tangible economic benefits to the South Asian people.
Nepal must leverage its diplomatic goodwill to focus strategically on non-contentious, high-impact cooperation, which means stepping up as an Impartial Bridge-Builder, pushing hard to get the vital SAARC Summit back on track, nurturing trust through quiet 'Track II' diplomacy, and firmly reminding everyone that consensus is the foundation. Alongside this diplomacy, Nepal must become the Economic Engine, aggressively driving regional connectivity using successful smaller models like BBIN as a blueprint and finally forcing through agreements on motor vehicles and railways. Critically, with its vast resources, Nepal should also prioritize Energy Cooperation like a regional power grid and speed up SAFTA Implementation. This economic momentum works best when paired with leading efforts on shared human issues like tackling Climate Change, boosting Public Health cooperation, and warmly expanding People-to-People contact. Ultimately, the heart of Nepal’s strategy is consistency, it must advocate for a stronger Secretariat with more power and the creation of a system that enforces signed agreements, transforming SAARC from a polite "talk shop" into a "do tank" through consistent, compassionate leadership.
